FIGURE 13- 1
-Refer to Figure 13- 1.On the Lorenz curve shown in the diagram,
A)perfect equality of income distribution occurs.
B)the functional distribution of income is shown.
C)the richest 20% of families earn over 60% of total income.
D)the richest 20% of families earn almost 40% of total income.
E)the poorest 20% of families earn almost 90% of total income.

Question

FIGURE 13- 1 
-Refer to Figure 13- 1.On the Lorenz curve shown in the diagram,
A)perfect equality of income distribution occurs. 
B)the functional distribution of income is shown. 
C)the richest 20% of families earn over 60% of total income. 
D)the richest 20% of families earn almost 40% of total income. 
E)the poorest 20% of families earn almost 90% of total income.

Quizplus · Accepted Answer

The Lorenz curve shows the cumulative share of income received by each percentile of households. The curve in the diagram shows that the bottom 20% of households receive about 3% of total income, while the top 20% of households receive almost 40% of total income. Therefore, D is the correct answer as it accurately describes the graph.